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S&P cuts Vericast
S&P said it downgraded Vericast Corp.’s issuer rating to CCC from CCC+.
The company's asset-based lending revolver and term loan mature next May due to the springing debt maturities in its credit agreements. Vericast's ABL revolver, with $116 million outstanding as of April 3, and senior secured term loan, with $1.4 billion outstanding, are subject to springing maturities under their respective credit agreements.
Unless Vericast retires its 8 3/8% senior secured notes due August 2022 with $800 million outstanding by next May 16, the ABL revolver and term loan will become due on that date.
“We do not believe the company will organically generate sufficient cash to service its 8 3/8% notes, thus it will be materially dependent on its access to the capital markets to refinance this obligation and avoid a default under its credit agreements,” S&P said in a press release.
The outlook is negative.
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